MN Passes Pension Bill to Get Fund Back in
Line

July 15, 2005 (PLANSPONSOR.com) - The Minnesota
legislature passed a bill to increase employer contributions
to the Public Employees Retirement Association (PERA) to 7%
of payroll in 2010, which will cost taxpayers $92 million per
year, according to the Minneapolis Star Tribune.

The contributions will be phased in beginning with a
jump from the current 5 1/2% to 6% in 2006 followed by
increases of 0.25 percentage points in four subsequent
years, the newspaper reported.
The bill also increased employee contributions.

Since PERA is the major source of funding for local
government pensions, it is those governments that will
shoulder most of the burden for the expense, the
newspaper notes.

Opponents felt the bill, passed in the final hour of
the state legislature’s special session, should
have been considered more thoughtfully. But, the
newspaper quotes Minnesota state senator Larry Pogemiller
as saying, “The idea is there’s no benefit
increase [in the bill]. It’s an employee and employer
increase. It gets it back on stable funding.”
Pogemiller said the contribution increases were
recommended by the Legislature’s Pension Commission,
according to the news report.

The bursting of the dot-com stock market bubble,
coupled with benefit increases, left the fund with about
77 cents in assets for every $1 in liability, according
to House Republican research staff, the Star Tribune
said.

Governor Tim Pawlenty said he was reviewing the
bill and expected to sign it.